Microsoft’s Irish subsidiaries pay US parent $56bn in dividends

Microsoft’s main Irish subsidiaries paid their US-based parent company just under $56 billion (€52.2bn) in dividends last year, accounts just filed here indicate.

Accounts for Microsoft Round Island One (MRIO), a subsidiary of the global tech giant that holds investments in other companies in the Microsoft group, show that it paid a dividend of $38 billion to its US-based parent in the year to the end of June 2023.

After the year end an additional dividend of $17.8 billion was “declared”, according to a note to the accounts, which are filed with the companies office here. It is not clear from the accounts if this sum has been paid over by the Irish subsidiary or if the payment is pending.

Microsoft’s network of companies in Ireland is structured so that each entity essentially sends dividend payments to MRIO, which are then paid to the global parent company Microsoft Corporation in Washington state.

MRIO paid $414,000 in corporation tax here, with income of $38 billion. MRIO’s income comes primarily from intercompany dividends received from another Irish-based entity, Microsoft Ireland Research, which pays corporation tax in Ireland on its profits. As such a large part of MRIO’s income is exempt from further taxation.

Turnover at Microsoft’s main Irish operating subsidiary rose last year as the tech giant’s business continued to grow, mirroring trends across the wider Microsoft business.

Revenues at Microsoft Ireland Operations Ltd (MIOL) were $69.9 billion in the year ended June 30th, 2023, up from more than $65 billion a year earlier, with its pretax profit at $3.9 billion. The company had a $588.7 million corporation tax bill for the period, with deferred taxation bringing that to more than $652 million.

MIOL paid a $9 billion dividend to MRIO, its accounts show.

MIOL is involved in the marketing, selling and distribution of hardware and software products and services for Europe, the Middle East and Africa, and the Asia-Pacific region.

Meanwhile, Microsoft Ireland Research, which licenses the rights to assets owned and developed by the company to others within the group, saw revenue rise by $3.85 billion to just shy of $52 billion as royalty income rose. The subsidiary said operating profit was $1.89 billion higher at $23.3 billion.

Its corporation tax charge was $4.2 billion, but its final tax bill was $2.8 billion as double taxation relief and other measures reduced the figure.